PastPaperHero | Assignment of a lease - Deduction of title by the assignor

Learning Outcomes

This article outlines how an assignor deduces title and completes a valid lease assignment for registered and unregistered titles, including:

Evidence and documents proving power to assign for registered and unregistered leasehold interests
Requirements for absolute versus good leasehold titles, including deduction of superior title and satisfaction of register restrictions before completion and registration
Compilation and assessment of an epitome of title for unregistered leasehold interests, including the land charges search regime and good root criteria
Landlord’s consent under the Landlord and Tenant Act 1988, typical licence to assign conditions (AGA on new leases; direct covenants on old leases), and timing/contract mechanisms where consent is awaited
Deed form, covenants for title wording, indemnity provisions, and post-completion registration steps (including OS1/K16 searches, notices, and dealing with restrictions)
Common risks (missing consents, unresolved breaches, incomplete chains of assignment, unregistered dispositions) and practical solutions and protections (e.g. upgrading title, indemnity insurance, compliant licence drafting) in SQE1-style scenarios

SQE1 Syllabus

For SQE1, you are required to understand the legal and practical framework for the deduction of title and assignment of leasehold interests, with a focus on the following syllabus points:

The process of deduction of title in lease assignments for both registered and unregistered land
The documentation and evidence required to prove the assignor’s right to assign, including where the lease is registered with good leasehold title
The role and requirements for landlord’s consent (including LTA 1988 reasonableness, timing and conditions)
The statutory and contractual requirements for a valid assignment (form of deed, covenants for title, indemnity, AGA)
Registration and post-completion formalities for assignments of registered and unregistered leases
Restrictions on the register, notices and priority searches (OS1/OS2) and bankruptcy searches (K16)
Land charges searches (K15) and good root/gap risk management in unregistered leasehold assignments
Risks and practical issues, including consent of mortgagees, unresolved breaches, service charge/rent status, and notice of assignment

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

What documents must the assignor provide to deduce title to a registered leasehold interest?
Why is landlord’s consent often required before a lease can be assigned?
What is a good root of title in the context of unregistered leasehold assignments?
What are the consequences of assigning a lease without obtaining required landlord’s consent?

Introduction

The assignment of a lease transfers the tenant’s entire term to a new tenant (the assignee). The outgoing tenant (assignor) must prove their right to assign by properly deducing title. That process differs for registered and unregistered titles and varies by class of title. Restrictions and registered notices may impose pre-conditions such as landlord or lender consent. Where consent is required, it must be obtained and properly documented—ordinarily in a licence to assign—before completion. The assignment must be by deed and, for registered leases, is not fully effective in law until registered. Privity rules also matter: for “old” leases (before 1 January 1996) direct covenants may be required; for “new” leases (on/after that date) an AGA may be a reasonable licence condition. This article focuses on how the assignor deduces title and the core steps and documents needed to deliver a valid, registrable assignment.

Deduction of Title in Lease Assignments

Deduction of title is the process by which the assignor proves to the assignee that they have the right to assign the leasehold interest. The method depends on whether the lease is registered or unregistered.

Deduction of Title – Registered Leasehold

Where the leasehold title is registered, the assignor’s solicitor must provide:

Up-to-date official copies of the leasehold register and title plan from HM Land Registry
An official copy of the lease and any deeds of variation or supplemental documents
Evidence of compliance with any restrictions on the register (e.g. landlord’s consent, lender’s consent)

Key Term: official copies
Official copies are certified extracts of the Land Registry register and title plan, admissible as evidence of title and required for property transactions.

The assignee’s solicitor must check the register for:

The class of title (absolute, good leasehold, qualified, or possessory)
The identity of the registered proprietor (assignor)
Any restrictions, notices, or encumbrances affecting the lease
The terms of the lease and any variations

Key Term: class of title
The quality of a registered estate (e.g. absolute leasehold, good leasehold). It determines what HM Land Registry guarantees and whether defects in superior title are excluded.

If the lease is registered with good leasehold title only, the freehold (landlord’s) title should also be deduced to satisfy the assignee and any lender that the lease is validly granted.

Key Term: good leasehold title
A class of title where the leasehold interest is guaranteed, but the freeholder’s title is not guaranteed by HM Land Registry.

In practice, for an absolute leasehold title the leasehold register normally contains all relevant burdens/benefits. For good leasehold titles, deducing the superior title reduces risk and can support an upgrade to absolute leasehold title. Best practice is also to supply any collateral instruments affecting the lease (e.g. previous licences to assign/underlet, rent review memoranda, side letters, variations, deeds of rectification). The assignee’s solicitor should interrogate the Proprietorship Register for restrictions (for example, a consent restriction protecting a landlord’s or lender’s interests, or a Form A restriction implicating overreaching mechanics on dispositions where capital money is paid).

Key Term: restriction
An entry in the Proprietorship Register limiting or regulating how dispositions can be registered (e.g. “no disposition without consent” or compliance evidence).

Key Term: Form A restriction
A standard restriction alerting to co-ownership and overreaching: no disposition by a sole proprietor under which capital money arises is to be registered unless authorised by the court.

Where the registered lease is an underlease, titles to the headlease (and sometimes the freehold) may be relevant to due diligence: check the headlease covenants and whether necessary superior consents are built into the licence to assign or required directly. If the headlease is registered with good leasehold title, superior title deduction becomes more important.

Deduction of Title – Unregistered Leasehold

For unregistered leasehold interests, the process is more detailed. The assignor’s solicitor must provide:

An epitome of title: a chronological list of all documents evidencing title to the leasehold interest, usually covering at least the last 15 years
Copies of the lease, any assignments, deeds of variation, and any relevant consents
Evidence of a good root of title

Key Term: epitome of title
A schedule of title documents (with copies) showing the chain of ownership for unregistered land or leasehold interests.

Key Term: good root of title
A document (usually a conveyance or assignment) at least 15 years old, dealing with the whole legal and equitable interest, with no defects or doubts as to title.

The assignee’s solicitor must check:

There is an unbroken chain of assignments from the root of title to the present assignor
All documents are properly executed and stamped
Any necessary consents (e.g. landlord’s consent) are present
There are no adverse entries or undisclosed encumbrances

Land charges searches must be carried out against all relevant estate owners for their period of ownership to reveal any registered interests (e.g. restrictive covenants, equitable easements). If a previous transaction should have triggered first registration (e.g. a transfer for value after the relevant compulsory registration date) but did not, insist on registration before proceeding or account for the risk with appropriate protections.

Key Term: K15 land charges search
A search at the Land Charges Department against names of estate owners for their ownership periods to reveal registered land charges affecting unregistered land.

For unregistered lease assignments, confirm stamping (or evidence of payment/relief) on deeds that would otherwise be inadmissible in evidence, verify execution formalities on older deeds, and watch for gaps in chains (e.g. name changes or deaths requiring documentary proof, such as marriage or death certificates and grants of representation/assents).

Most leases contain a covenant restricting assignment without the landlord’s written consent. The assignor must obtain this consent before completion.

Key Term: landlord’s consent
The formal written approval from the landlord (or superior landlord) required before a lease can be assigned, as specified in the lease.

The process usually involves:

The assignor applying to the landlord with details of the proposed assignee and any required references
The landlord considering the application and (for qualified covenants) not unreasonably withholding or delaying consent (Landlord and Tenant Act 1988)
The landlord issuing a licence to assign, often including conditions (e.g. an Authorised Guarantee Agreement or rent deposit)

Key Term: licence to assign
The document by which the landlord formally consents to the assignment; it often includes reasonable conditions and may include direct covenants (old leases) or an AGA (new leases).

Assignment without required consent is a breach of covenant and may result in forfeiture of the lease.

Reasonableness and timing: where the covenant is qualified or fully qualified, the landlord must give consent within a reasonable time and can impose only reasonable conditions. Reasonable time is fact-sensitive but is generally assessed in weeks, not months; conditions often include receipt of robust financial references, remedy of existing breaches, payment of arrears and costs, provision of a rent deposit or guarantor, and—on “new” leases—an AGA.

Old vs new leases (privity): for “old” leases (pre–1 January 1996), landlords typically seek a direct covenant from the assignee in the licence to assign, creating privity of contract for the remainder of the term. For “new” leases (on/after 1 January 1996), tenants are released on lawful assignment; landlords may reasonably require an Authorised Guarantee Agreement (AGA) from the outgoing tenant as a condition of consent.

Key Term: Authorised Guarantee Agreement (AGA)
A guarantee by the outgoing tenant of the immediate assignee’s performance of tenant covenants in a new lease; it lasts only while the lease is vested in that assignee.

Clarity and form: ensure correspondence does not inadvertently amount to consent and that the licence captures all agreed conditions and parties (including any superior landlord and mortgagee whose consent is also required under the lease or a restriction).

Where consent is outstanding at the target completion date, contract provisions often postpone completion until consent is obtained or a declaration is secured that it is unreasonably withheld/conditioned, sometimes with a longstop enabling rescission if consent is still unavailable after an agreed period.

Other Consents and Practical Issues

If the leasehold interest is subject to a mortgage or charge, the lender’s consent may also be required. Any restrictions on the register must be complied with before the assignment can be registered.

The assignor must also provide evidence that all rent and service charges are paid up to date, and that there are no outstanding breaches of covenant.

Assignments must be by deed, and dispositions of registered land take effect in law only on registration. For registered leases, an assignment must be registered whatever the unexpired term; for unregistered leases, an assignment triggers first registration if more than seven years remain unexpired.

Key Term: TR1
Land Registry transfer form commonly used as the deed to assign a registered lease (and for unregistered leases where first registration will be triggered).

Key Term: OS1 priority search
An HM Land Registry search against a registered title that gives a 30-working-day priority period to protect registration of the disposition.

Key Term: K16 bankruptcy search
A land charges “bankruptcy only” search against an individual buyer/borrower to protect lenders and sellers against a voidable disposition in bankruptcy.

Additional steps that commonly arise:

Priority and solvency checks: conduct an OS1 search against the leasehold title shortly pre-completion, and a K16 bankruptcy search against an individual assignee; where companies are involved, run a company search (and consider a telephone winding-up search in high-value cases)
Restrictions: satisfy the wording of any restriction (consent certificates, overreaching where capital money is paid and a Form A restriction is present)
Notice to landlord: serve formal notice of assignment and mortgage on the landlord/superior landlord in line with lease requirements and licence conditions, and pay any registration fees
Deed wording: modify covenants for title to exclude liability for breaches of tenant repair covenants; add any required indemnity provisions
SDLT/LTT: assess whether consideration on the assignment generates a filing/payment obligation; rent is not usually relevant on an assignment (unlike a grant), but premiums/consideration may be
Underlettings: if the assignment is of an underlease, verify whether both the head landlord’s and the immediate landlord’s consents and any direct covenant are required, and deduce the headlease as needed

Key Term: notice of assignment
A notice served on the landlord/superior landlord after completion, required by the lease and/or licence, evidencing the change in tenant and enabling rent/service charge records to be updated.

Worked Example 1.1

Scenario:
A tenant holds a registered leasehold interest in a shop. The lease contains a qualified covenant against assignment without landlord’s consent. The tenant wishes to assign the lease to a new business.

Question:
What documents must the assignor’s solicitor provide to deduce title, and what steps must be taken before completion?

Answer:
The assignor’s solicitor must provide up-to-date official copies of the leasehold register and title plan, an official copy of the lease and any variations, and evidence of compliance with any restrictions (including landlord’s written consent to assignment). The solicitor must also ensure all rent and service charges are paid, and that any lender’s consent is obtained if the lease is charged.

Worked Example 1.2

Scenario:
A tenant holds an unregistered leasehold interest in a flat. The lease is over 15 years old and has been assigned several times. The tenant wishes to assign the lease.

Question:
What must the assignor’s solicitor do to deduce title, and what searches are required?

Answer:
The assignor’s solicitor must provide an epitome of title showing an unbroken chain of assignments from a good root of title, with copies of all relevant documents. Land charges searches must be carried out against all estate owners for their period of ownership to reveal any registered interests.

Worked Example 1.3

Scenario:
A lease is registered with good leasehold title. The assignee’s lender asks for the freehold title as part of title due diligence.

Question:
What additional deduction is appropriate and why?

Answer:
The assignor should deduce the freehold title (official copies if registered, or an epitome if unregistered) to satisfy the lender and support the validity of the lease grant. This reduces risk of defects in superior title and may support an application to upgrade the leasehold class of title to absolute.

Worked Example 1.4

Scenario:
An unregistered lease with nine years unexpired is being assigned for value.

Question:
What are the deed and registration requirements and what searches should be carried out?

Answer:
The assignment must be by deed, often using a TR1. The assignment triggers first registration because more than seven years remain, so an application for first registration with supporting title documents is required within the statutory period. Pre-completion, a K15 land charges search should be undertaken against the current owner, and an Index Map search considered to confirm unregistered status.

Worked Example 1.5

Scenario:
A lease granted in 2002 contains a fully qualified covenant against assignment of whole. The landlord will consent only if the outgoing tenant gives an AGA and remedies minor non-structural breaches.

Question:
Is that position generally reasonable and how should the licence to assign address it?

Answer:
For a new lease (post-1995) an AGA can be a reasonable condition of consent, especially where covenant strength is in question, and requiring remedy of existing breaches and payment of arrears is also commonly reasonable. The licence should set out the consent, AGA terms, any conditions (breach remedy, costs), and require timely post-completion notices to the landlord.

Worked Example 1.6

Scenario:
The parties exchange contracts conditional on landlord’s consent. Consent has not been received by the contractual completion date and the landlord has not unreasonably delayed.

Question:
What is a common contractual approach to deal with timing?

Answer:
A typical approach is to postpone completion until a specified short period after written notice that consent is given or that a court has declared consent is unreasonably withheld. Contracts often include a longstop (for example, months after the original completion date) after which either party may rescind if consent or a declaration remains outstanding.

Exam Warning

Assigning a lease without obtaining required landlord’s consent is a breach of covenant and may result in forfeiture. Always check the lease for assignment restrictions and ensure all consents are obtained before completion. Remember: dispositions of registered land (including assignment of a registered lease) take effect in law only on registration.

Revision Tip

For SQE1, memorise the difference between deduction of title for registered and unregistered leasehold interests, and the consequences of failing to obtain landlord’s consent.

Summary

Deduction of title by the assignor proves the right to assign and differs between registered and unregistered systems.
Registered leaseholds: provide official copies, lease and variations, and show compliance with any restrictions; consider deducing superior title where the leasehold class is “good leasehold.”
Unregistered leaseholds: provide an epitome from a good root, ensure an unbroken chain, check execution/stamping, and run land charges (K15) searches.
Landlord’s consent is usually required; under the LTA 1988, consent must not be unreasonably withheld or delayed and conditions must themselves be reasonable.
Licences to assign typically include an AGA for “new” leases or direct covenants for “old” leases, plus standard conditions (remedy of breaches, costs, references).
Assignment must be by deed; for registered leases, registration is essential to complete the disposition in law. Use OS1 priority and K16 bankruptcy searches pre-completion.
Manage restrictions (including consent and Form A) before registration; serve required notices of assignment; verify rent/service charge status and remedy breaches.

Key Point Checklist

This article has covered the following key knowledge points:

Deduction of title by the assignor for registered and unregistered leases
What to supply for absolute versus good leasehold titles and when to deduce superior title
How to prepare and assess an epitome of title and run land charges searches (K15)
Landlord’s consent, LTA 1988 reasonableness, and the content of a licence to assign (AGA/direct covenant)
The deed and registration requirements for assignments (TR1; registration to complete in law)
Priority, bankruptcy and company searches (OS1/K16) and handling restrictions (including Form A)
Practical protections: remedy of breaches, service charge/rent statements, lender/superior consents and post-completion notices

Key Terms and Concepts

official copies
class of title
good leasehold title
epitome of title
good root of title
landlord’s consent
restriction
Form A restriction
licence to assign
Authorised Guarantee Agreement (AGA)
TR1
OS1 priority search
K15 land charges search
K16 bankruptcy search
notice of assignment

Assignment of a lease - Deduction of title by the assignor